When I started Appnovation Technologies over a year and a half ago, it was just me and a contractor. About 2 months after starting the business, I hired our first employee. We now have a staff of 12 people at the company.
There are a number of tricky areas when hiring your employees. They include:
- interview process
- employment contract
- payroll
Interview Process
When I started the company, we had no interview process. All I did was post up ADs on job boards, collect responses, and set up interviews. Each candidate is asked a different set of questions, and I just decide on who to hire based on my gut feeling. While this worked for a few months, I later learned that I am not able to objectively choose candidates based on how their skills match the job description and how they will fit well with the organization.
I ended up creating a document on questions to ask each candidate. There is also a 2 step interview process where candidates are not just interviewed by me, but also the 2 technical leads at my company. This ensures that we choose the right person for the team.
For younger companies, having the right team is the key to success.
Employment Contract
Other than the interview process, employment contracts are the next major item in hiring employees. Unlike contracting, employment is governed by the BC Employment Act . This means that there are a lot of rules on how emloyees are paid and treated. Some of the key items include vacation pay, payroll deductions and severance. Overtime pay is also a big issue. Note that a lot of the clauses in the employment act do not apply to IT/Software development industries. This includes the overtime pay requirement. It is critical that your employment contract covers all the major areas that define the employment relationship. Other typical issues in the tech industry is intellectual property ownership and non competition. As a result of this and the complexity of the issue. It makes a lot of sense to invest in getting a properly written employment contract.
Payroll
Paying an employee and is not as simple as writing a cheque for the person’s pay every 2 weeks. There are certain deductions that need to be made on your employee’s behalf such as Income Tax, CPP and EI. If you do not file these deductions properly, your company will be fined by government. I would recommend using Simply Accounting, QuickBooks or other software that helps you calculate the payroll amount. Once you reach a high volume of payroll processing requirement (10+ employees), it makes sense to use an outsourced Payroll solution such as that with Sage Online Payroll Software or ADP.
Benefits Plan
Once your company grows to a certain size with more senior staff, it would be time to think about getting a group benefits plan in place. The cost of these plans vary, but a few compaies that offer them to smaller companies include Great West Life and Manulife. Most companies share the cost of these plans with the employee on a 50/50 basis or a 70/30 basis.
